New Orleans: Jobs, Workers, and Barriers to Economic Equity
By Edith Rasell, Justice & Witness Ministries

New Orleans was a poor city long before Hurricane Katrina arrived on August 29, 2005.  In 2004, 23% of the city’s residents lived below the poverty line, ten percentage points more than in the nation as a whole. Median family income was just two-thirds of the national average.(1)  Unemployment in the city was 12%, over twice the national rate.(2)

New Orleans was also a majority African American city. Before the storm, Blacks comprised over two-thirds (68%) of the population, while Euro-Americans were 26% and Latinos were 3%. 

After Katrina, tens of thousands of workers, especially African Americans, lost their jobs. Housing was destroyed. Needed services such as health care, child care, and public transportation were severely curtailed. In addition, government and private institutions established conditions that facilitated the exploitation of some workers and the exclusion of others. These conditions make it difficult for many workers, especially poorer ones and people of color, to return to the city.

The number of household receiving mail delivery is one indicator of the city’s population. Approximately one year after the storm, the number of households in the New Orleans metro area with active mail delivery was 78% of the pre-Katrina level. By November, 2007, the figure had climbed to 86%. But there were large differences among parishes. In the more hard hit parishes of Orleans and St. Bernard, the 2007 figure was just 71% and 41%, respectively, while in Jefferson Parish it was 98%. By 2006, the share of African Americans in the city had fallen to 59%, whites had risen to 34%, and Latinos had risen slightly to 4%.(3)

Setting the stage – an erosion of legal protections for workers
Within days of Katrina, President George W. Bush issued a series of executive orders that greatly increased the likelihood of worker abuse and discrimination, especially of those in blue collar occupations, and of African American entrepreneurs. 

• On August 30, 2005, the day after Katrina hit New Orleans, the U.S. Occupational Safety and Health Administration suspended enforcement of health and safety measures on the job. This meant that firms engaged in clean-up were not fined for failure to provide protective equipment such as masks, gloves, or respirators to workers handling hazardous materials such as mold, petroleum, asbestos, arsenic, and other toxins. Nor were employers penalized for failing to provide appropriate safety training to workers.

• Just eight days after Katrina, the Department of Homeland Security announced it would suspend, for at least 45 days, sanctions against Gulf Coast employers who hired workers who could not present documents normally required by federal immigration law. This encouraged the recruitment and hiring of undocumented workers.(4) However, for the first time in more than 20 years, the federal government failed to suspend immigration enforcement to allow disaster victims to seek emergency services (or protection against worker abuses).(5) Approximately two months later, DHS reinstated employer sanctions but this did not impact workers who had already been hired.

• On the 10th day after Katrina, President Bush issued an executive order waiving the requirement that private contractors receiving federal dollars pay their workers at least the prevailing (average) industry wage of the region. In addition, contractors were no longer required to maintain records on wage rates paid, thereby facilitating wage discrimination and fraud.(6) However, in the face of strong objections by activists, unions, and some members of Congress, this action was rescinded two months later. But in the meantime, some $500 million to $1 billion in contracts had been awarded and these contracts remained exempt from the prevailing wage requirement.(7) 
 
• On the 11th day after the hurricane, the Department of Labor suspended affirmative action requirements. Federal contractors, who would receive billions of dollars in federal contracts over the coming months, were no longer required to implement affirmative action and anti-discrimination plans. Moreover, many of these were “no-bid” contracts, awarded to large, politically-connected national and international firms. By October 4, 2005, $1.6 billion in contracts had been let. Just 1.5% of these had gone to minority contractors, far below the already low federal standard of 5%.(8)

In a nation, already beset by racism and anti-immigrant sentiment, the relaxed legal framework and a post-disaster chaotic environment led to extreme abuses of workers.

Problems for Workers
The problems and barriers that workers encounter include wage theft, the nonpayment and underpayment of promised wages; exposure to toxins, workplace injuries, and the denial of workers compensation for on-the-job injuries; the lack of housing, childcare, public transportation, and subsidized housing; and structural racism.

• Wage theft, the nonpayment and underpayment of promised wages. Interviews with workers show wage theft to be a very widespread problem especially among undocumented workers who comprise 25% of the workforce.(9) It can take many forms. Employers may pay workers with checks that bounce. A subcontractor who is not paid by the primary contractor or by another subcontractor may be unable to pay workers. Even with assistance, workers may be unable to collect owed wages because they cannot identify the employer or contractor.  One survey found that 47% of workers had experienced wage theft.(10) In some areas of the city up to 60% of workers have experienced it.(11) Construction workers typically work an average of 9½ hours per day, six days a week. But few workers receive extra pay for hours worked above 40 as required by federal law.(12)